China, S. Korea plan free trade talks: State media

BEIJING - China and South Korea said Wednesday they would formally begin negotiations on a free-trade agreement, state media reported, with the talks expected to take two years.

Chinese commerce minister Chen Deming and South Korea trade minister Park Tae-Ho made the announcement in Beijing, the official Xinhua news agency said.

It did not say when the talks were expected to start.

The two sides agreed in January to launch formal talks after South Korean President Lee Myung-Bak visited China.

China is South Korea's largest trading partner and Beijing forecasts trade between the two sides will reach US$300 billion (S$376 billion) by 2015, up from US$245.6 billion last year, according to Chinese customs data.

Chen said the free-trade agreement will cover goods, services, intellectual property rights and investment among other areas, Chinese state radio reported Wednesday.

The negotiations will also include "sensitive" areas of the two economies, such as South Korea's agricultural sector and China's petrochemical, electronics and machinery industries, the report said.

China's commerce ministry could not be reached for comment.

South Korea's finance minister in January called for early negotiations on a free trade pact with China so that Seoul can compete against Taiwan in the lucrative Chinese market.

Bahk Jae-Wan said a landmark pact between Beijing and Taipei in 2010 put South Korean firms at "a great disadvantage".